News Feature | March 27, 2014

Water Line Insurance: Utility Officials Unsure Of Its Merits

Some utility officials are wary of companies that try to sell their customers water line insurance, describing such offers as a potential waste of money.

At issue are the pipes that run from the water main into a ratepayer's home. Utilities generally do not pay for problems with those lines, according to BDN Maine. And most homeowners insurance policies do not cover those costs, either.

Various companies offer insurance for those particular pipes. In general, utilities choose not to advise homeowners on whether to buy it. For instance, the Bangor Water District in Maine chooses not to endorse any of the companies that offer coverage to its customers, the report explained.

Even though utilities generally stay quiet on the issue, many officials said they are wary of this type of insurance. When it comes to water line coverage, "consumer advocates and utility officials say you need to be careful," according to the Los Angeles Times.

"Some policies out there can be quite good," Jim McDaniel, who oversees the Los Angeles Department of Water and Power's water system, said in the report. "Others have so many exclusions that they don't have much value."

The Portland Water District in Maine helps homeowners buy insurance for these pipes. It teamed up with HomeServe, "an independent company that offers [water line] insurance. HomeServe’s website says the company has partnerships with other utilities across the country," the report said.

“We are just offering it,” said Michelle Clements, a spokesperson for Portland Water District. “We don’t encourage our customers one way or another.”

But Homeserve policies have raised eyebrows in other parts of the country.

"Homeowners and government officials in the greater Milwaukee area are concerned that formal-looking advertising materials from an insurance company called HomeServe is tricking consumers into buying water line insurance that they may not need," the Journal-Sentinalreported.

Not all customers need water line insurance, experts explained. When deciding whether to buy a policy, it is important to consider the age of the home, Bangor Water District General Manager Kathy Moriarty said in the BDN Maine article.

"Moriarty said the water lines in most newer homes are made of copper. The lines usually are deep enough so as not to be moved by frost. And, barring breakage by construction equipment or an earthquake, copper lines should provide good service for many years," the report said.

Galvanized steel, on the other hand, does not last as long as copper.

"Homeowners with such pipes connecting to the mains might want to think about insurance or replacement. As the letters soliciting coverage state, repairs can run into the thousands of dollars. And few of us would welcome a disruption in water service for whatever period repairs would require," the report said, citing Moriarty.